Despite the availability of insurance for a wide variety of individual and business/organizational risks, there are areas where many potential consumers do not buy or do not maintain insurance despite the presence of insurable risks and available options. There are a myriad of reasons why these areas tend to be underserved including, for example, areas of small business insurance where lack of a legal or contractual mandate or the perceived cost and complexity of available options prevents awareness or interest in insurance offerings.
Additionally, there are many insurance products that suffer from the buy and cancel phenomenon. Using the example above related to small business owners, there are numerous small business owners who buy and cancel policies. These owners tend to have periods during which they are mandated to have insurance and therefore only participate when mandated despite certain insurable risks continuing outside of the mandated period.
The underserved markets tend to create cottage industries of other mechanisms to substitute for the insurance product that is avoided or not procured. These mechanisms include warranties, self-funding options including cash reserves and credit cards, specific selection of business structures, and/or personal insurance.
It is in the interest of insurance companies to target these segments and provide products that will fulfill these needs in a way that demonstrates a clear value for the price with simple activation or configuration.